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The Kudlow Report

Larry Kudlow provides his unique perspective on business, politics and investing.

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Us 9, Josh 5, Kathy 4, Kudlow 4, Oklahoma 4, Arizona 4, Anthony 4, S&p 3, Washington 3, Ukraine 3, Fcc 3, Steve Pierce 2, Mitch Mcconnell 2, Steve Moore 2, Dave 2, Ford 2, At&t 2, Low 2, Greg 2, Obama Administration 2,
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  CNBC    The Kudlow Report    Larry Kudlow provides his unique  
   perspective on business, politics and investing.  

    February 25, 2014
    7:00 - 8:01pm EST  

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two tracks, good ones rational. the bad one, well, enough with the price target jumps, okay? i'd like to say there's always a bull market somewhere. i free market capitalism, applies to color, religious, race and sexual orientation. while i respect religious freedom truly, i still think arizona governor jan brewer would do well to veto a bill that would discriminate against gays. it's bad for business and capitalism. we'll have a live update in just a few minutes. also supply side tax reform is back. dave camp is going to unveil his new plan tomorrow morning. we'll join us on the "kudlow report" in the evening. we will preview the story tonight. we have the fcc commissioner who blew the whistle on the
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government's attempt to dictate and bias news stories. now we learn that this government assault may not be over. all those stories and much more coming up on the "kudlow report" beginning right now. >> good evening, everyone. i'm larry kudlow. this is the "kudlow report." we're live at 7:00 p.m. eastern and 4:00 p.m. on the west coast. our top story tonight, will arizona governor jan brewer veto a gay discrimination bill passed by the state legislature. nbc news joins us with the details. good evening. >> reporter: of course the poe opponents call it a religious freedom bill. in any event, governor brewer who is on the spot on this has just returned to arizona after attending a three-day governor's conference in washington. she'll know that the momentum toward a veto has been building fast.
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>> all right. i guess we lost the tape, mike, but we got you and that's just as important. >> i guess we did, yeah. >> i'm reading the same thing that you are reading. it looks like you've got businesses like apple and the nfl super bowl putting pressure on her, but you have some well meaning people on the religious right who are going to fight this. >> reporter: steve pierce was the majority whip and the republican senate. it was a vote along party lines. pierce said he supported it, voted for it. he didn't see it as an anti-lgbt bill. he saw it as a question of religious freedom. that's what they're saying on that side. they thought about it for a bit and started listening to the voices about how much opposition there was to it, and there's one important fact about this. in the past governor brewer has signed controversial
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legislation, the so called anti-immigration bill a few years ago. that ended up costing the state understand of millions of dollars but that bill was supported by 70 to 75% of the people in arizona. this bill is opposed by the same amount world to some poles. if she sign it, she signs it as part of opposition in her state. >> if i have this right, three state senators have changed their position, they voted for the bill but they're saying the next vote they're going to vote nay? >> steve pierce is one of them. he said he talked to a lot of others in the republican caucus and they've been saying the same thing. they're not unmindful of the consideral positions that voters and the legislatures have taken. they lost the super bowl in the 80s because of opposition to martin luther king day. they lost the super bowl. you know how much money that cost. so this is a case where a lot of
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business owners have said that they would leave or stop doing business or look to move elsewhere if this were passed. some are saying they're already getting inquiries from people cancelling reservations, for example, at hotels. this becomes a question not of religion, necessarily, but of money and money matters and talks. you know that. >> absolutely. i see this as a business story. anyway, we appreciate your story very much. free market capitalism, it's blind to things like race, religion, color, gender and sexuality. that's the economics of it. while i have enormous respect for religious freedom and beliefs, i just don't see this as the key issue in the discussion. that's why i think governor jan brewer should veto what really amounts to a gay discrimination bill and an anti-business bill as well. but many people disagree with me. here now to discuss outgoing
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business insider, politics editor, josh bare row and we welcome kathy, senior fellow at the family research council and spokesperson for the u.s. catholic bishops. kathy, let me begin with you. you're talking to a pro life catholic. you probably know that. >> i do. >> on this one, i think the capitalist free market principles quite frankly trumped the religious issues. tell me why you disagree. >> this is the same balancing test that ted kennedy and chuck schumer voted into federal law in 1993. larry, this has been with us for 20 years. it's not new. the only thing arizona is doing is tweaking it, truly tweaking it very slightly so that private business owners in addition to broader associations can assert these religious freedom rights. the bill doesn't mention sexual orientation. it's simply religious liberty and the person asserting it would have to prove a lot before you would win your case and you would have to prove a
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substantial burden on your religious freedom. >> that's a key point, what you just said. look, i'm going to quote quickly from the christian post that did a pretty good legislative analysis of this. there's a religious freedom restoration act in arizona that was first passed in 1999. no business people have used it. no one has denied business services to anybody. so your point that this doesn't necessarily trigger discrimination is a very important point. it's such an important point that i don't think you need to change this religious freedom restoration act which wasn't used in the first place. >> but it needs to be changed because of people like elaine of elaine's photographer fee. we all know the case well. 50 photographers were lined up to photograph a same sex wedding. one lady said i can't because of my religious convictions, i can't photograph it, sorry. i'll do other photographs but i can't do the wedding.
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we didn't tolerate one person descending and saying i can't participate in this business transaction when there are 50 other people to do it. elaine of elaine's photography does not have protection. they are allowed to make the claim. they should be allowed to make the claim. >> josh, welcome to the "kudlow report." >> thank you. >> a lot of people are saying this isn't about religious liberty. it's about legalizing discrimination, intolerance. some people are saying it's a jim crowe for gays. what's your own view on this? >> first of all elaine of elaine's photography lives in new mexico so he's not impacted by this law. jan brewer vetoed a law in 2011 and what she said at the time was that there have been no cases that she's aware of that would have been applicable under that bill so there was no reason to bring it forward. similarly here this is about a
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theoretical imposition that might exist. i find it gauling, you have gays and lesbians in arizona who have been under the thumb of a government that has discriminated against them, treated them as second class citizens and now we're supposed to worry about somebody who might theoretically have to make a cake they didn't feel like baking. it's brought up because of the anti-gay issue even though it's true that gay rights are not specifically mentioned in the law. i think that's why people have lined up against this. it's a distraction and being done in a way that's punitive against gays. >> kathy, what i don't get, suppose i'm a shopkeeper of some kind and two people walk into my shop. i don't know what they are or gender or sexual preferences or religion. i don't know anything about that. i'm a capitalist. i'm here to serve them to make a buck and generate some profitability. to me that's the crux of this issue. >> you couldn't win your case. based on the facts you just
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described you would not be able to win your case because you have no sincere religious belief and no burden on that belief. >> then how would we know or why do we even want to know? maybe i should ask that question. >> that's why these cases have only come up with participants in same sex marriage ceremony. that's different than serving somebody in a restaurant. there has never been a case where somebody was allowed to refuse to serve at a restaurant because of some religious belief. it just hasn't happened. what has happened are wedding bakers and photographers and the like. it would be like saying should a catholic videographer be forced to participate in making a film promoting abortion? of course not. you have a right to not participate in that film. this tweaking of bill would cover that and protect that person's rights. >> i hear you on that, but,
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josh, let me go back to you. look, i'm a pro life guy and i certainly believe with cardinal dolan that the mandates for abortion should not be in the obamacare bill. i certainly agree with that. but you know, josh, i got my capitalist hat on tonight. >> sure. >> that's the thing that i just don't see. suppose kathy is right and suppose a couple wants some figure evreens on top of a weddg cake. why doesn't the baker thank them and say joe down the street is the guy to talk to. why make a federal case or a state judicial case? >> this law is not as limited as kathy is making it out to be. at some point gay marriage will be legal in arizona, probably in the next few years. so then you won't just have issues about weddings. an employer could say i want to provide health benefits to my married employees but not to ones with same sex spouses or i
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don't want to provide hotel rooms to married couples who are same sex couples. >> they wouldn't win their case. >> they would very well have a sincere religious objection and they could have a sincere religious objection to providing that service. >> that's not the whole test. >> it doesn't say that it specifically pertains to same sex weddings as there is a proposal in oregon that would be extremely narrow in that rart. they would be able to assert that claim. >> they wouldn't win their case because they wouldn't be able to show a substantial burden. the government has a chance to respond and say there's a compelling interest. this has been on the books for 20 years and it's never happened. >> conservatives or quite reasonably warning that vague laws like this that require -- >> it's not vague. it's been tested in court. it's the same test we have had for 20 years. >> we'll see what happens.
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look, i respect both of you, josh and kathy. i appreciate it. this is just one of those difficult issues. like i say, i don't know that i have all the wisdom on this, but i do have my capitalist hat on. anyway, josh bar row, thank you so much and kathy thanks so much. another state governor is in the news right now as oklahoma's mary fallin says president obama is very close to finally making a decision on the keystone pipeline. we're going to talk to governor fallin herself about that and much more. later on the republicans are about to come out with their sweeping plan for supply side tax reform. how about that. we're going to get the highlights for you in just a couple of minutes. for now, don't forget free market capitalism is the best bet to prosperity, supply side tax reform. i'm kudlow, we'll be right back. , 3 million lines of code, 40,000 sets of eyes,
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>> he did come back and say that he anticipates an answer one way or the other in a couple of months. so we hope that we will know one way or the other what the answer will be. of course i'm a big supporter of the keystone pipeline. >> we don't all agree that moving canadian oil through the
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united states is necessarily the best thing for the united states economy. >> i think there are things we can do instead of waving the white flag of surrender and declaring that economy to be a minimum wage economy, i think we can do better. >> things got testy outside the white house yesterday as governors voiced their disagreement on issues like keystone and the minimum wage and tax reform, all this after meeting with the president. what's not debatable is that thanks to their pro growth policies red state republican governors are allowing their states to lead the economy recovery. much different than nationwide. joining us is one-on-one tonight, oklahoma republican governor and chair of the national governor's association, we welcome back mary fallin. governor fallin, thanks very much. i heard this conclusion reported about a couple of months to decide on keystone. i don't get a couple of months. they've been looking at it for years. they've had all these studies. the state department just did
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another study. we need all the oil that we can possibly get and by the way keystone is a lot safer, is it not, than rail and truck and all the rest of it? what takes so long to put this through? >> you're right, larry, on all those points. i don't know what's taking so long. we've been talking about this since 2008. we have had the studies done and been waiting. we keep asking the question why don't you just approve the keystone pipeline. i asked the president this week when we had our national governor's association meeting at the white house just on monday, why don't you just do an executive order to go ahead and push through the keystone pipeline. he did say, well, i'm not going to tell you which way we're going to go but you're going to have an answer in a couple of months. hopefully we will have an answer. i'm hoping that we will get the pipeline approved. we have had the keystone pipeline from the curbing
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pipeline in oklahoma to the gulf coast. we want it to flow from the canadian oil to the gulf of mexico. it's important to get it done, not only for national security but certainly for economic security and job creation so we can continue to have energy independence in the united states and not by foreign oil. pretty simple. >> he's got a telephone and a pen. i wish he would use it an keystone. let's move on. governor fallin, he did state to the governors and of course you're the chair to the association. what else was he selling? for example, i recon he talked about the minimum wage which has become very controversial after a cbo study that says it will cost jobs. what do you say about the minimum wage? >> well, one of the things we do when we come together for our winter meeting is to take about issues with the president. of course he talks about the issues that are important on his agenda. he did push for the minimum wage. he's talking a lot about climate change. he's talking about the work force which we talk about a lot,
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i think it's important to the nation. he talked about infrastructure development and of course the governors are saying we need more flexibility. we believerevolution. we talked about work force skills and closing the gap between what employers need for job skills and what type of skills employees need so we can grow america's economy. we talked about how we need to keep our taxes low, at least those of us on the republican side. we talked about how the states are leading with solutions that we don't have the luxury of having interaction like washington d.c. and congress. we have to act to balance our budget. >> that's the one thing -- this is what i don't get. you're a supply side tax reform in oklahoma. right nearby, my friend sam brownback, governor of kansas doing the same thing and a whole lot of red state republicans are doing that. this is the one thing the president hasn't tried.
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he has spent. he has regulated. he's jaw boned. he won't make decisions on keystone. the one thing he hasn't tried was a series of supply side tax cuts like john f. kennedy, like ronald reagan for example. why doesn't he try the formula that you all in the red states have shown works? >> we're showing that it does work in the red states with republican governors. we've been cutting taxes, reforming pension systems, prioritizing spending. we've gone from deficits to surpluses. we're growing jobs, growing our economy. we're providing once again sources of energy from whatever source it might be, depending upon which state you're in. we're proving these things do work. but we also told him the time it takes to get permits, we would like to have offshore drilling. we would like to have more cooperation from the epa and different federal regulatory entities that take so long to
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get through. those things are holding jobs back. of course, he has a different philosophy, that the more government spends, the more it will help the economy, which we believe differently. we believe you let people keep more of their hard earned money they're going to spend it back in the economy and create jobs and businesses. >> congress at budget office, nonpartisan, has come out with a study in the last week or so that says basically obamacare is going to cost up to 2.5 million jobs, lost jobs from obamacare, and about 1 million lost jobs in the minimum wage. question, if you know -- if you knew as governor, if your budget bureau told you that your policies were going to lose 3.5 million jobs, would you go through with them? >> no, i wouldn't. that's why i didn't support the affordable care act. in fact, if you look at just say the affordable care act itself, there's a report that came out today that said 11 million small businesses are going to see their insurance premiums go up. two-thirds are them are going to see a cost increase.
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those are scary figures that would hurt business. it would hurt economy and certainly hurt families. >> governor fallin, we got to leave it there. thank you very much. we appreciate your time very much. good luck on this keystone thing. it just seems like such a layup to me but what do i know. >> we just need to get it done. >> mary fallin, thanks very much. stick around and see this, an amazing inside look at the lavish palace that was the home of ukraine's ousted president. what does $75 million get you these days? we'll be right back with the answers and much more of this astonishing video. vo: once upon a time
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president is on the run, people are able to get inside his presidential palace. you are not going to believe this. cnbc's own michelle ka barra gives us a tour. >> reporter: the former president of ukraine, viktor yanukovych is on the run, wanted in connection with the deaths of dozens of protestors in last week's bloodshed. thousands of ukrainians are descending on his former estate and can't believe what they see. >> the guards tell us this is the most grand room in the palace. look at the intricate in-laid floor, the furniture with gold guilding and this white baby grand piano, a stein way. this is the balcony of the
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former palace. look at the floor, granite and marble. look over the banister here. many tourists have come to see how he lived. they can't believe the immense amount of wealth in a country so poor. you can see the river where he tried to dump more than 100,000 documents before he fled. he brought guests here to play bill yard. a brass shower head. this is one of the many bedrooms. quite large with a choir place and a sitting area. this is the biggest coat closet i have ever seen. most of the stuff has been removed but still he left behind many coats are clearly all made of cashmere. the gdp per capita in ukraine, larry, less than $4,000. back to you. >> thanks to michelle.
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i wonder if it's up for rental. story. believe it or not, folks, switch gears, major supply side tax reform may be on the way. we are talking about just two brackets, 10% and 25% for individuals and 25% for corporations. that would reignite this economy. just imagine. we're going to go to washington for the details. that's all coming at you next up on kudlow. let me talk to you about retirement.
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welcome back to the "kudlow report," the show that has for years been begging for supply side tax reform out of washington. guess what? tomorrow ways and means chairman dave camp is going to announce a new tax reform plan. here this morning with a preview and cnbc's own john harwood. good evening. >> i think you're going to like it. take a look at what dave camp is putting out in what he calls a discussion draft. it is very similar to the rosten cow ski reagan tax reform of the 1980s. he collapses the current seven rates down to two, ten percent and 25 percent. a surveillance tax on 10 percent on earned income $450,000.
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at the top that would be effectively a 15% rate down from the current 20%. but there's going to be controversy because we haven't seen the pay fors. one of them that wall street is bracing for, larry, a bank tax similar to president obama's financial responsibility fee. we still have to learn about how they're going to pay for getting these rates down. all the things that could be on the table, marortgage interest, employer's health care expenses, chair itable deductions. mitch mcconnell said we're not doing tax reform this year. having said that, dave camp has been working on this for years. his partner went over to china to be the ambassador and dave camp is laying down his marker in a discussion that's likely to
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extend for several years. >> john, john, why would senator mitch mcconnell throw a wet blanket over this whole exercise. as you said this is a reaganesque, 1986 policy. everybody says it's pro growth. it looks like it's going to be plenty fair because you're going to cap exclusions left and right. why in god's name would mcconnell beat up on what dave camp's group has been working on for years? >> he doesn't want to raise expectations that this can be done, especially after that debt limit fight when he had to reverse his vote, looking to smooth the waters as much as possible. a lot of republicans are not going to like this. for example if they come out and have this bank tax a lot of people are going to say why are we raising taxes on the private sector. if you eliminate the mortgage production you're going to put
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republicans members as being vulnerable to being attacked. it's a mind field as you know because getting rates down is valuable. everybody likes it, but how you get them down is difficult. >> john, thank you so much for giving us that preview. to react to all of this, we're joined by harvard university economics professor and former white house advisor greg mancue. if i'm not mistaken he still has the most popular course at harvard college. >> that's right, larry. >> and he has the most popular economics textbook in the country. greg, it's great to see you. kon thanks for coming back on. there is talk but i don't know that -- we haven't had the good leaks yet but the corporate tax rate would probably be about 25%. what's your thinking on this? >> i think tax reform is an absolutely fantastic idea as a policy matter. the idea of broaden be the base
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is exactly what economists having calling for, both the democrats and the republicans. they called for something along these lines so that's a great idea. corporate tax reform is long overdue. a lot of the rest of the world have already lowered corporate tax rates. we have one of the highest corporate tax rates in the worldmeworl world. it's one of the most distortion naer taxes we have and long overdue. >> i'd love to reform the personal tax code, too and go back to simple rates and so forth. but to ignite this economy and particularly get these companies investing again, to me corporate tax reform is the single most important thing to stimulate the economy, and that includes getting that cash that's sitting overseas back here at home. if you had your choice, where would you go? personal or corporate? >> ideally you would do both in a comprehensive way. i think if you had to choose
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one, it would be the corporate side because i do think that's one of the most distortion area taxes we have. i'm not terribly optimistic about it because republicans tend to want to move towards a territorial system, not worrying about what multi-nationals are doing abroad. most countries don't worry about taxes outside their jurisdiction. we try to tax money everywhere and the obama administration wants to increase taxes. it's two very different views. >> let me change gears. you had a great piece in the "new york times," yes, the wealthy can be deserving. and you were kind of mocking this inequality debate. why are we -- why is inequality so important? if we -- let's take energy, greg, for a second. you create a lot of millionaires, people are leasing their land and getting royalties
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but you're also creating tens of thousands of jobs, the field workers, the roust abouts. if the roust about makes $80,000 and the land holder is a millionaire, there might be some equality but who cares? >> they don't mind the rich getting rich as long as two things are occurring, the rich are doing it in a way that's socially productive and creating something of value for the economy, and secondly, they pay their fair share of taxes. for the vast majority of rich people that's the case. what i was trying to argue in the times is that most rich people including ceos, actors, authors, most of these people are earning a lot of money by creating something of value. by and large they pay about a third of their income in taxes. so i think bernie madoff is the saeng exception and not the rule. what we need to do is get the economy growing so the incomes in the middle start growing and
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focusing on the people at the top i don't think is the right way to do that. >> speaking of the economy growing, the congressional budget office which seems to be working out a much more incentive model, labor incentives, in the last week or two they put out a couple of studies, number one, the minimum wage, going to lose up to a million jobs. number two, they're looking at obamacare longer term. that thing may lose 2.5 million or the equivalent of hours work lost. if you were sitting at the council of economic advisers and you see cbo coming out saying these policies could lose 3.5 million jobs, wouldn't you want to change something? >> sure. the congressional budget office has done a great job recently. i'm a very big fan of doug elmendo elmendorf. i've known him since he was a student at harvard. a lot of these policies have much more adverse incentive
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effects than the obama administration is willing to admit. the minimum wage is not a particularly good way to help the poor. there are better ways like the earned income tax credit. they're not really expecting to get anything done, i don't think. they're trying to change the subject away from obamacare to talk about other things that might pole better in order to do better in these mid-term elections coming up. >> a meeting between speaker boehner and president obama one-on-one, first time they've met alone in quite some time. what i get from the story, mr. boehner says there's not going to be immigration reform this year, and the president is saying there's not going to be any trade reform this year. now, me, i think free trade is pro growth, and i think if you do it right, immigration reform is pro growth. i don't see where the growth policy is going to come from. how do i get from two percent to
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four percent? >> they're both important and they are both pro growth. there's a natural fear of foreigners. when they are selling us goods and providing labor, it makes us nervous, but it shouldn't. trade and immigration can be a win-win for foreigners and for the american people. those are two things that can be widely agreed upon by both parties. >> is it true that you still have the most popular undergraduate course at harvard college? >> i do. it's introductory economics. we have about 700 students t it's a full year course, micro economics in the fall, macro economics in the spring. it's not me. they love economics and they realize that to understand the world they have to understand economics. >> but do they listen to you because you're sensible and i want you to send them out in the world with your sensible ideas. as you told me on the show many
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years ago, you said, larry, it's supply and demand. i've never forgotten that. >> that's right. supply and demand. we teach them both. >> greg, mankiew, thank you ever so much for coming back on the show. now, folks, do you think the fcc is finished with its attempt to politically intimidate the news media? think again. fcc commissioner is trying to put a stop to this regulatory overreach and he is about to join us.
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outlets, cable networks and the internet. >> what about this one? i'm reading various people telling me there's another study that's going to go on or has already started regarding race or gender-based media ownership, and that, in fact, the fcc wants to have rather strict rules. i guess quotas of some kind. is that possible? is that the next step? >> there are some constitutional and other legal limits on what we can do along those lines. one of the things that the fcc has historically been interested in is promoting greater and more diverse ownership of broadcast and other outlets. that's something we can do certainly outside of the context of this kind of critical information needs study. >> why do i need an fcc? as you yourself just said, there's so much competition around. you can't hardly move. i mean, the idea of the media,
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quote unquote, has completely changed from the early '80s when i worked for reagan's first term. why do i need an fcc? >> that's a great question. one of the reasons is the fcc when it sets a regulatory framework that creates an environment where investment and innovation and competition can thrive, the american people benefit. we've seen it in the wireless industry, we're seeing it in the broadband industry and the story of the media marketplace over the last 40 years since we last adopted our media rules has been one where competition has flourished. i think that's something the fcc would do well to remember when it steps into this marketplace. >> i'll tell you, sir, i mean i'm glad you're there and you're doing the lord's work. but whether it's broadband issues or the old fairness doctrine, the fcc is on the wrong side of every issue. you talk about innovation and entrepreneurship, you're right,
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god bless. the fcc on the wrong side, the ftc, all these independent agencies. i say get rid of them. >> part of the frustration that you have with agency comes into sharp relief when it comes to the media because we do have a core first amendment freedom. so when you combine the way that the study was created with that core fcc freedom -- first amendment freedom, i think people do rightly get concerned. >> i don't want to put you out of a job. i'm glad you're there. >> i appreciate that. >> you may have to blow the whistle again but these regulatory agencies drive me crazy. next up on the "kudlow report," stocks may have been flat today but remember, folks, simple, profits are the mother's milk of stocks and profits are at record levels. think about that. we're talk about your money with your team of experts next up on the "kudlow report." 40,000 sets of eyes, or a million sleepless nights. whether it's building
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stocks up a a little today. s&p ended down three. can wall street resume its run at record highs? of course it can. let's get right with our cnn investors. we have contributor carol roth and after a lengthy absence, anthony scaramucci of sky bridge capital is back. we're totally honored to have anthony in our panel. anthony, in honor of your being on, can we continue to set
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record profits as we have for five years and therefore record stock markets? >> it's great to be back but the answer is a resounding yes. this is a plus 15% market in our opinion going into the end of 2014. the headline i'm going to give you is that obamacare helped stock market. i'm going to give you two reasons why. number one, it's slowing down the economy. it's going to leave the fed spigot open longer than people anticipate. it probably means that the house will stay in the republican hands which means it will be very low likelihood for tax increases, and the economy is growing but it's not growing at a pace that it should be growing at. this augers well for our stock market. so we like names like google, time warner, dow chemical. profits are up so i'm not overly concerned. >> i want you to take anthony's point about obamacare is good
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for the market i'm going to borrow this for my pal steve moore at the heritage foundation. on the radio show saturday steve moore said that the greatest destructive force against liberalism, the most powerful force to end liberalism is obama and obamacare, and that's why it's bullish. obamacare itself with all its taxes -- obamacare is showing us how liberalism fails. do you agree with that or not? >> that's kind of a big statement to make, larry. >> he's the guy driving it through. we'll never have this kind of thing again for generations. >> it's true i think. a lot of these policies are damaging and people are start to see, whether it's minimum wage or obamacare what that means in terms of job losses and what concerns americans more than anything right now is the fact that we have too many people who are still unemployed and far too many people who are underemployed. so i think that that is a major
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issue. but when if we want to talk about that visa vee the stock market and the consumer, the consume driving this higher, yes. s&p up over 120% in profits but 7% in revenues over the same time. >> why do i care about that? >> you cannot cost cut your way to prosperity indefinitely. it's worked while we have fed intervention but eventually we need the feds to get out of the way. the market is not growing on its own merits. >> you got to get her on the right track. i want to go back to this point. >> you took out 70 years of liberalism, larry. >> that's what we're doing here. it's not personal. i personally like the guy. >> i like him. >> his policies are so unpopular right now that i think we're going to elect a republican senate. that's going to be bullish. we may get the kind of supplied
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side tax reform that dave camp is going to announce tomorrow. all those things are possible. but most of all, anthony, when i look at this business about revenues that carol always talks about, take a look at the charts, both of you. what's down -- i don't mean down but low, low, low is wages. profits are high, high, high. wages are low, low, low. i think that's a pity. but i think that's the story of this so-called poor recovery. anthony, i don't think that's going to change. that's why i think bad profit forecasts are wrong. there's no wage pressures in the labor market. >> there's no wage pressure. there's an increase in automatic miization and there's a rising balance sheet of cash. $2.8 trillion of cash on the s&p 500 balance sheet, the largest percentage of market capitalized cash, larry, since the 1950s. they'll buy back stock, increase
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dividends. we're forgetting about graham dodd. it's empowered billionaire hedge fund managers to be very effective minority shareholders. you hear about new activism by carl icahn, dan lobe. they have a handgun that's put at the head of ceos and boards all over corporate america -- >> in the name of short-term shareholder value, it's not long-term. >> but, carol, the question is about the market this year and the market is going higher because of these reasons. >> these are not growth factors. i respect every name you mentioned. these are brilliant guys, but this doesn't promote long-term economic growth. >> there has to be incentive structure and you have this record level of cash but you also have a record level of net debt. there's $1.5 trillion in net debt on the balance sheets. >> compared to assets, debt is
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not -- >> $1.5 trillion but then tuf cash -- >> compare death to wealth assets and you will find it has gone way, way down. >> what are they using the financing for? they're using financing not to invest in capital. they're using it, as anthony said, for short-term valuation. >> that's just freedom. i'm not worried about that. anthony, what i'm worried about is i want jobs. are i don't want goofy policies. >> remember how you get jobs -- >> i want pro growth policies. get the government out of the way, provide better after tax incentives so that wages start growing again. that's what i want. >> everything operates on incentives, larry. it's still a free market system. you can't command somebody to pay $10.10. you're in a free market system. there's huge wage pressure.
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we have the highest corporate tax rates in the world. one thing i think that's going to be unpredictable about the obama administration is they may push corporate tax reform and that will also be good for the market. >> i'd like it. i don't believe it but i'd like it. carol, thank you, anthony, thank you. everybody, thanks for watching. gosh, we're going to have a big tax reform show tomorrow. congressman dave camp, head of ways and means committee will tell us all about it. [ tires screech ] [ car alarm chirps ] ♪
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